We are geared up for the mega order: AEW

Allied Engineering Works (AEW) recently received an order for 2 million prepaid meters from Energy Efficiency Services Ltd (EESL). In this exclusive conversation with T&D India, an elated Ashutosh Goel, Managing Director, AEW talks to Venugopal Pillai on how his company is gearing up to fulfil this mega order. Goel also dwells on the finer technical differences between prepaid and conventional meters, whilst also clearing popular misconceptions about smart meters.

Is this your single largest order till date?

Yes!

 

What is the schedule for completing this order?

We plan to complete the order over the next 12 months. We have already geared up for it. We have done the necessary expansion at our plant.

 

Where is your plant located?

Our plant is located in the Samaypur Badli area, Delhi.

 

What is your product portfolio, in the metering business?

We made prepaid and regular meters as well as smart meters, in single-phase and three-phase. By regular meters, we mean the conventional (post-paid) electronic energy meters.

 

The current order is for pre-paid meters. What is the significance of prepaid meters?

What we first need to understand is that conventional energy meters are generally used in the post-paid billing ecosystem. In this case, the consumer first uses electricity and then pays for whatever was used during the billing cycle, which is usually thirty days. Inclusive of the credit period given by the utility, the payment cycle can go up to 45 days from the date of consumption. If you take cases of delayed payment, the situation can get even worse, resulting in negative cash flows for the utility.

What is required is to turn this cycle into a prepaid one where the utility gets the money upfront. Prepaid energy meters are the only way in which utilities can achieve this.

 

What is the key technical difference between a prepaid meter and a conventional energy meter?

The technical difference is that in a conventional energy meter there is no “control” mechanism; it is only a measuring instrument. A prepaid meter, on the other hand, has both measuring and the controlling mechanisms. The controlling capability helps the utility to disconnect supply to the consumer, for non-payment or any other reason.

 

In terms of cost how does a prepaid meter compare with a conventional one?

Due to this controlling mechanism, which is very substantial, the cost of a prepaid meter would be 70-80 per cent higher than a conventional one. In terms of actual cost, while a conventional meter could cost Rs.750-800 per unit, the prepaid one would be in the range of Rs.1,350-1,400 per unit.

 

What are your views on the so-called smart meters, which is said to be face of smart grids.

Firstly, I would like to clear some misconceptions! There is always a comparison between prepaid meters and smart meters. There is a general notion that a smart meter is a one-stop solution to all the electricity metering problems in India. But the fact remains that in rural areas where the average electricity consumption in a household is, say, even below Rs.500 per month, it makes little sense to use smart meters. The smart meter cost itself is Rs.2,000 per unit, and there are also other overheads that could add up to Rs.2,500 per meter. The second part is that in rural areas there are also technical issues like weak and shoddy telecom networks—GPRS or GSM. There are also, what are known as “shadow areas” where there is no network. Smart meters in such areas can never be used a reliable prepaid energy meter.

So for areas where electricity consumption is low, the usage of smart meter is not advisable. Even though mass procurement programmes, like that of EESL, have resulted in a drop in prices, smart meters are still costlier than prepaid meters.

 

EESL has plans to replace some 250 million conventional meters with modern meters of different kinds—prepaid meters, smart meters, etc. How do you see the prospects for AEW?

We, at AEW, are going to participate in this procurement drive very aggressively. We have already doubled our capacity over the past six months, and over the next six months, we will again be almost doubling it. We are gearing up to meet a volume of 5-6 million meters per year.

“EESL has introduced procurement systems that are very robust and transparent. We can all see the results! Procurement prices have fallen very sharply.”

 

What is your current capacity?

In the current set-up we can do around 3 million meters annually. Our expansion will focus on prepaid and smart meters.

 

Do you have any technical collaboration, especially for your smart meter business?

Yes, we are doing a collaborative R&D project with a Canadian company in which we are presenting a smart meter equipped with RF (radio frequency) communication system.

 

EESL, as we understand, has floated a tender to procure 5 million smart meters on a pan-India basis. Have you participated in this tender?

We have not participated in this particular tender because there is some clarity pending with respect to technical specification of the smart meters. I feel that even the specifications of the communication network and the system integration has to be a little clearer.

 

What is your view on the overall mass procurement systems of EESL, at least in the meters domain?

EESL has introduced procurement systems that are very robust and transparent. We can all see the results! Procurement prices have fallen very sharply.

 

Could you quantify the reduction in prices?

I think it is in the range of 30-35 per cent.

 

Apart from this large order from EESL, we understand that you have been supplying meters to various state utilities.

Yes, we are working with discoms in Uttar Pradesh, Madhya Pradesh and Punjab. We are also working with power utilities like NTPC. Our company, I may mention, is also in the business of manufacturing cables, providing advanced metering infrastructure (AMI) solutions, and undertaking project work in the power distribution space.